Seeking to address concerns over college affordability,
Republican presidential nominee Donald Trump threatened September 22 to end the
tax-exempt status of college endowments that don't spend enough of their funds
on lowering tuition costs or supporting student activities.

Eric Schneiderman, Attorney General of
New York, indicated that he has started an investigation into the Trump
Foundation: In a CNN interview on Tuesday, Schneiderman
said his office had now brought Trump's charitable foundation under scrutiny.
"My interest in this...

The Clinton Foundation will stop accepting donations from
foreign and corporate donors if Democratic presidential nominee Hillary Clinton
wins the election in November, limiting donations to only those from U.S.
citizens or independent charities, a spokesperson for the foundation said
August 18.

The IRS will start processing the exemption applications of some
Tea Party organizations that have been waiting years for the agency to tell
them whether they qualify for tax-exempt status, according to the Justice
Department.

Senate
Finance Committee’s top Democrat wonders whether
Trump might be “hiding evidence of questionable international business
dealings by not releasing his tax return.” He says lawmakers will again
push legislation that would require presidential candidates to release
their tax returns. “This information should be available to voters before
they vote.”

Ted
Cruz and Marco Rubio released summaries
of their tax returns over the weekend. Rubio released Form 1040s for tax
years 2010 to 2014, when his effective tax rate varied from 9.4 percent to
27.4 percent. Cruz released his 1040s for 2011 to 2014. His effective tax
rate ranged between 28.38 percent and 32.22 percent. Neither disclosed any
supplemental forms or schedules. Both demanded that Donald Trump release
his tax filings.

But
he says it will have to wait.

Trump
says he wants the IRS to complete what he says is an annual audit before
he’ll release his returns. While the IRS is mum about Trump’s returns,
Commissioner John Koskinen says it’s rare
for a taxpayer to be audited every year. “Usually when there’s an audit,
and it’s cleared up, if there are no other issues, it’s a number of years,
two or three at least, before you hear from us again, unless something in
your next return pops up.”

Affordable Care Act signs up 540,000 in first week of open enrollment—how much of
the law will the Senate vote to repeal next week? The Department of Health and Human Services released preliminary
enrollment numbers yesterday, noting a “solid
start.” Senate Republicans aren’t yet sure how
far to go in their effort to repeal the law. The leadership wants to dump as much as it can, but some GOP senators want to
preserve its expansion of Medicaid. Meanwhile, Senate Democratic Leader Harry
Reid says the majority can only make “tailored
changes” to the bill through reconciliation.

Supreme Court to Decide
Contraceptive Mandate Challenge

Posted
November 06, 2015, 2:40 P.M. ET

The
Supreme Court today granted review of yet another controversial issue raised by
the Affordable Care Act: It will hear oral argument on objections filed by religious
nonprofit corporations to provisions that, they say, require them to engage in
sinful acts.

Specifically,
the cases—seven in all—target regulations that require large employers to offer
employee plans covering birth control at no cost to the employees. The
government attempted to accommodate the religious nonprofits' objections by
saying those groups could opt out of the requirement by telling the Department
of Health and Human Services in writing of those objections, at which point
their insurers would become responsible for supplying the coverage. Complying
with the accommodation, however, would make the groups complicit in easing
access to birth control, they said. That in itself violated their rights under
the Religious Freedom Restoration Act (RFRA), they said.

The
Supreme Court previously ruled that the birth control mandate violated the RFRA
rights of for-profit, closely held corporations whose owners objected to
providing birth control coverage. The court in that case, however, pointed to
the fact that the mandate didn't contain any accommodation that would permit
such entities to opt out.

The Treasury Department announced this morning that after concluding
the initial phase of its myRA
program, the department will be expanding the program with new funding options.

The expanded portions of the myRA
program include the ability for retirement savers to fund a myRA
account directly by setting up recurring or one-time contributions from a
checking or savings account, according to a fact sheet. In addition, myRA savers can direct all or a
portion of a federal tax refund to a myRA.

“myRA can give people
confidence that they’re taking steps in the right direction, and it can serve
as a bridge to other savings options that will carry them the rest of the way,”
said Treasury Secretary Jacob J. Lew in announcing the expanded program. “myRA alone will not solve the nation’s retirement savings
gap, but it will be an important stepping stone for encouraging and creating a
nation of savers.”

Social
Security and Social Security Disability Insurance (SSDI) Provisions in the
Proposed Bipartisan Budget Agreement of 2015 (PDF)
13 pages. "Among these changes is a temporary reallocation of the Social
Security payroll taxes so that a larger share is deposited in the Disability
Insurance (DI) trust fund to extend the life of this trust fund beyond its
current predicted exhaustion in 2016. Under this provision, the allocation of
the 12.4 0% Social Security payroll tax assigned to the DI trust fund would
increase from 1.80% to 2.37% and the allocation to the Old-Age and Survivors
Insurance (OASI) trust fund would decrease from 10.60% to 10.03%. These changes
would last through 2018. In addition, these provisions extend the Social
Security Administration's (SSA) demonstration authority for the Social Security
Disability Insurance (SSDI) programs, make changes to data and earnings
reporting, and increase penalties for benefit fraud." [Report
No. R44250, dated Oct. 28, 2015.] (Congressional Research
Service [CRS])

Bipartisan Budget Act set to pass the House late this
morning. Senate passage is likely as soon as Friday or as late as next
Tuesday. Just before midnight last night, by voice vote, the House Rules
Committee cleared the Senate Amendment to H.R.1314 with an
amendment, setting the vote for late this morning after one hour of
debate. Passage is very likely. The Rules Committee action was
delayed until an amendment could be drafted which corrected a drafting error in
the Overseas Contingency Operations funding and to fully pay for the bill,
which CBO scored
as $14.06 b. short, by increasing Pension Benefit Guarantee Corporation fees
and by extending pension stabilization for another year, through 2020.
The pension stabilization changes would cut spending by $6.4 b. and raise
revenues by over $5 b. FY16-FY25. Opposition is mounting over the $3 b.
crop insurance pay for as well. Senator Rand Paul (R-KY) plans to
filibuster, but that will be overcome, although it may delay passage until
early next week.

The
per-participant flat-rate premiums for single-employer plans would jump to $68
for plan years beginning after Dec. 31, 2016, and before Jan. 1, 2018; to $73
for plan years beginning after Dec. 31, 2017, and before Jan. 1, 2019; and to
$78 for plan years beginning after Dec. 31, 2018, according to the bill, which
now must be voted on by the House and Senate.

The
budget deal also would hike the variable-rate premiums for single-employer
plans by $2 in calendar year 2017, $3 in 2018 and another $3 in 2019.

Bipartisan Budget Act of
2015 Section-by-Section Summary

Sec. 1. Short title; Table
of Contents.

Subsection 1(a) provides that
the short title of this Division is the ‘‘Bipartisan Budget Act of 2015’’. Subsection
1(b) sets forth the table of contents for the Act.

Title I – Budget
Enforcement
Sec. 101. Amendments to the Balanced Budget and Emergency Deficit Control Act
of 1985.

The limits on discretionary
spending are established in section 251(c) of the Balanced Budget and Emergency
Deficit Control Act of 1985 (BBEDCA). The limits are subdivided in each fiscal
year through 2021 into two categories: revised security category and revised nonsecurity category. The revised security category is
defined to be the National Defense budget function (Function 050) which
includes funding for the Department of Defense, the nuclear weapons- related
work of the Department of Energy, intelligence-related activities, and the
national security elements of the Departments of Commerce, Justice, Homeland
Security, and several independent agencies. The Department of Defense
(including the intelligence programs) usually receives over 95 percent of the
budget authority in this function. The revised nonsecurity
category comprises discretionary spending not contained in the revised security
category. Subsection 101(a) amends section 251(c) of BBEDCA to increase the
limits on discretionary spending for fiscal years 2016 and 2017. The revised
levels for each category are shown in the table.

(Millions of $BA)

FY 2016

FY 2017

Revised Security

Revised Non- Security

Revised Security

Revised Non- Security

Current Law

$523,091

$493,491

$536,068

$503,531

Revised Cap

$548,091

$518,491

$551,068

$518,531

In addition to the limits on
discretionary spending, section 251A of BBEDCA also includes a
sequester of direct spending, the size of which interacts with the
discretionary spending levels.

Subsection 101(b) provides
for the implementation of the sequester of direct
spending as if the amendments in subsection 101(a) had not been made. The
President is required by law to implement the sequester of direct spending
ordered on February 2, 2015 and the one in the Sequestration Preview Report for
Fiscal Year 2017 as if the amendments in subsection 101(a) had not been made.

1

Subsection 101(c) reduces
spending by $14 billion in fiscal year 2025 by requiring the President to
sequester the same percentage of direct spending in 2025 as will be sequestered
in 2021. It also replaces the arbitrary dips and increases in the Medicare
sequester percentages in 2023 and 2024 with a flat two-percent rate as applies
under current law in fiscal years 2016 through 2022.

Subsection 101(d) establishes
minimum adjustments to the defense and non-defense caps for overseas
contingency operations in fiscal years 2016 and 2017 providing certainty for
two years on approximate OCO levels.

Sec. 102. Authority for
fiscal year 2017 budget resolution in the Senate.

Subsection 102(a) authorizes
in the Senate a congressional budget for fiscal year 2017. Subsection 102(b)
provides that the chair of the Senate Committee on the Budget will submit after
April 15 and no later than May 15, 2014 for publication in the Congressional
Record allocations of budgetary resources for each congressional committee,
aggregate spending and revenue levels, and levels of revenues and outlays for
Social Security that will be enforceable as if included in a conference
agreement on a budget resolution. Subsection 102(c) provides that the
submission pursuant to subsection (b) may also include reserve funds adopted in
the fiscal year 2016 budget resolution for fiscal year 2017 updated to cover
the new budget window. Subsection 102(d) provides that this section shall
expire if a budget resolution conference report for fiscal year 2017 is agreed
to by the House and the Senate.

Title II - Agriculture
Sec. 201. Standard Reinsurance Agreement.

Section 201 amends the
Federal Crop Insurance Act to require that the Standard Reinsurance Agreement
be renegotiated no later than December 31, 2016 and at least once every five
years thereafter. This section also establishes an 8.9 percent cap on the
overall rate of return for insurance providers under the agreement. Currently,
the negotiated overall rate of return is approximately 14.5 percent.

Title III – Commerce Sec.
301. Debt collection improvements.

Subsection 301(a) amends the
Communications Act of 1934 to authorize the use of automated telephone equipment
to call cellular telephones for the purpose of collecting debts owed to the

(Millions of $BA)

FY 2016

FY 2017

Defense OCO

$58.798

$58.798

Nondefense OCO

$14.895

$14.895

2

United States government. This
subsection also authorizes the Federal Communications Commission to issue
regulations to limit the number and duration of any such calls.

Subsection 301(b) requires
the FCC to issue regulations to implement this section within 9 months of the
date of enactment of the Bipartisan Budget Act of 2015.

Subsection 401(a) amends
section 161 of the Energy Policy Conservation Act (EPCA) to require DOE to
notify Congress prior to any Strategic Petroleum Reserve test sale, with an
exception for emergency drawdowns, and to submit a report following any sale.
Subsection 401(b) amends section 3 of EPCA to include terrorism as a qualifying
cause of severe energy disruption.

Sec. 402. Strategic
Petroleum Reserve mission readiness optimization.

Section 402 requires DOE to
conduct a strategic review of SPR and develop proposals related to its role in
national policy, relevant legal authorities, configuration and performance, and
long- term effectiveness.

Sec. 403. Strategic
Petroleum Reserve drawdown and sale.

Subsection 403(a) authorizes
the sale of 58 million barrels of oil from the Strategic Petroleum Reserve (SPR)
from 2018-2025. Subsection 403(b) prohibits sales under subsection (a) if such
sales would limit the ability of the SPR to meet its strategic purpose of
preventing and reducing the adverse impacts of severe domestic energy supply
interruptions. Subsection 403(c) requires the proceeds of the sale to be
deposited in the General Fund of the treasury to reduce the deficit.

Sec. 404. Energy Security
and Infrastructure Modernization Fund.

Subsection 404(a) establishes
an Energy Security and Infrastructure Modernization Fund (Modernization Fund).
Subsection 404(b) provides that the purpose of the Modernization Fund is to
provide for the construction, maintenance, repair, and replacement of Strategic
Petroleum Reserve facilities. Subsection 404(c) authorizes the sale (subject to
approval in advance through the appropriations process) of up to $2 billion of
oil from the SPR and for deposit of the proceeds of the sale in the
Modernization Fund. It also prohibits sales under this authority if such sales
would limit the ability of the SPR to meet its strategic purpose of preventing
and reducing the adverse impacts of severe domestic energy supply
interruptions. Subsection 404(d) establishes the authorized uses of the
Modernization Fund balances for operational improvements to extend the useful
life of SPR’s surface and subsurface infrastructure; maintenance of SPR cavern
storage integrity; and addition of SPR infrastructure and facilities to

3

optimize the drawdown and incremental
distribution capacity of the Strategic Petroleum Reserve. Subsection 404(e)
authorizes up to $2 billion of sales under subsection 404(c) from 2017-2020.
Subsection 404(f) requires the Secretary of Energy to provide detailed plans in
the Department of Energy’s annual budget requests. Subsection 404(g) terminates
the authority provided in subsection 404(c) after 2020.

Current law: Single-employer
pension plans annually pay a fixed premium to the PBGC, which is indexed for
inflation, and will be $64 per person in 2016. Single-employer plans also pay a
variable rate premium, which is indexed to inflation and will equal $30 per
$1000 of underfunding in 2016.

Provision: The
single-employer fixed premium would be raised to $68 for 2017, $73 for 2018,
and $78 for 2019, and then re-indexed for inflation. The variable rate premium
would continue to be indexed for inflation, but would be increased by an
additional $2 in 2017, an additional $3 in 2018, and an additional $3 in 2019.

Sec. 502. Pension Payment
Acceleration.

Current law: The due date for
premiums is generally the fifteenth day of the tenth full calendar month of the
premium payment year.

Provision: The premium due
date for plan years beginning in 2025 would be the fifteenth day of the ninth
calendar month beginning on or after the first day of the premium payment year.

Sec. 503. Mortality
Tables.

Current law: Private sector
defined benefit pension plans generally must use mortality tables prescribed by
the Treasury for purposes of calculating pension liabilities. Plans may apply
to Treasury to use a separate mortality table. Plans qualify to use a separate
table only if (1) the proposed table reflects the actual experience of the
pension plan maintained by the plan sponsor and projected trends in general
mortality experience, and (2) there are a sufficient number of plan
participants, and the plan was maintained for a sufficient period of time to
have credible information necessary for that purpose.

Provision: The determination
of whether the plan has credible information shall be made in accordance with
established actuarial credibility theory, which is materially different from
the current rules. In addition, the plan may use tables that are adjusted from
the Treasury tables if such adjustments are based on a plan’s experience.

4

Sec. 504. Extension of
Current Funding Stabilization Percentages to 2018 and 2019.

Current Law: Single employer
defined benefit pension plan liabilities may be valued by using either spot
interest rates or by taking into account the interest rates on investment grade
corporate bonds over the prior two years. Under MAP-21 (the 2012 highway bill)
and HAFTA (the 2014 highway bill), interest rates for valuing liabilities in
2012-2017 are deemed not to vary more than ten percent from the average
interest rates over the prior twenty-five years. That corridor increases by 5
percent per year through 2021, at which point it remains permanently at 30
percent, which has the effect of deferring companies’ deductible required
pension contributions.

Provision: The corridor on
interest rates would remain at ten percent through 2019. The corridor would
increase by five percent per year through 2023, at which point the corridor would
remain permanently at 30 percent. The provision would generally be effective
for plan years beginning after December 31, 2015. This proposed reduction in
required pension contributions would, purely at the discretion of employers
that choose to take advantage of this pension funding relief, result in those
employers having more taxable income (because the contributions that they elect
to defer are tax-deductible when contributed). This is estimated to increase
revenues as compared to the budget baseline. It is also estimated to result
indirectly in increased Pension Benefit Guaranty Corporation (PBGC) premiums
because employers that, purely at their discretion, choose to take advantage of
this funding relief would have a larger base for purposes of computing the
variable rate premium on underfunding.

In 2015, the monthly Part B
premium rate is $104.90. Without Congressional action, the estimated monthly
Part B premium in 2016 for beneficiaries not held harmless would be $159.30.
This policy would maintain the hold harmless provision in current law and
prevent a dramatic premium increase on beneficiaries not held harmless. This
policy accomplishes this by setting a new 2016 basic Part B premium for the
beneficiaries not held harmless at $120, which is the amount the Part B premium
would otherwise be for all beneficiaries in 2016 if the hold harmless provision
in current law did not apply. To effectuate this policy, in 2016, there would
be a loan of general revenue from the Federal Treasury to the Supplemental
Medical Insurance (SMI) Trust Fund. To repay the loan, starting in 2016, beneficiaries not subject to the hold harmless would pay an
additional $3 in their monthly Part B premium until the loan is repaid.
Medicare beneficiaries who currently pay higher income-related premiums would
pay higher than $3, the amount of which would increase for beneficiaries in
each higher-income bracket in proportion to income-related premiums under
current law. If there is no cost of living adjustment increase for 2017, this
provision would apply again.

Currently, single source and
innovator multiple source drugs pay an additional rebate if the price of the
drug has increased faster than inflation (CPI-U). The inflation-based rebate,
however, does not apply to generic drugs. Section 602 would apply the
inflation-based rebate currently paid on brand drugs to generic drugs.

SEC. 603. Treatment of New
Off-Campus Outpatient Departments of a Provider

Section 603 would codify the
Centers for Medicare & Medicaid Services (CMS) definition of provider-based
(PBD) off-campus hospital outpatient departments (HOPDs) as those locations
that are not on the main campus of a hospital and are located more 250 yards
from the main campus. The section defines a “new” PBD HOPD as an entity that
executed a CMS provider agreement [after the date of enactment]. Any PBD HOPD
executing a provider agreement after the date of enactment would not be
eligible for reimbursements from CMS’ Outpatient Prospective Payment System
(PPS). New PBD HOPDs, as defined by this section, would be eligible for
reimbursements from either the Ambulatory Surgical Center (ASC PPS) or the
Medicare Physician Fee Schedule (PFS).

Sec. 611. Repeal of
automatic enrollment requirement.

Section 611 repeals Section
18A of the Fair Labor Standards Act (29 U.S.C. 218a), as added by section 1511
of the Affordable Care Act. Section 1511 requires employers with more than 200
employees to automatically enroll new full-time equivalents into a qualifying
health plan if offered by that employer, and to automatically continue
enrollment of current employees.

1.Require
all agencies with civil monetary penalties covered by the statute to update
penalties based on their value in the last update prior to 1996 and the change
in the CPI between that date and October 2015. The increase in penalties that
results from this “catch up” calculation would be capped at 150% (so a penalty
now set at $10,000 could not increase to more than $25,000).

2.Require
all agencies to adjust their civil monetary penalties annually based on changes
in the CPI, using data from October of each year.

3.Replace
current rounding rules with a simple rule that penalties be rounded to the
nearest dollar.

4.Apply
these provisions to the Occupational Safety and Health Act and civil penalties
assessed under the Social Security Act.

6

5.Allow
a Secretary of a covered agency to increase one or more penalties covered by
these provisions by less than the new formula through a rulemaking only
if the Secretary finds that increasing the penalty by the required amount will
have a negative economic impact or that the social costs outweigh the benefits
and the Director of the Office of Management and Budget concurs with this
analysis.

6.Speed
implementation by:

1.requiring
OMB to issue guidance on how to implement the inflation provisions

by January 31, 2016 and annually
thereafter by December 15th;

2.requiring
agencies to publish the first adjustment in the penalties by at latest July

1,
2016 through Interim Final Rulemaking (specified in statute) to become

effective by at latest August 1, 2016; and

3.starting
in January 2017, and annually thereafter, require agencies to publish

annual updates by January 15theach year in the Federal Register (specified
in

statute). These annual inflationary
adjustments would not require rulemaking.

7.Improve
oversight and agency compliance by (a) requiring agencies to include

information about penalties and their adjustments
in agency annual financial statements, and (b) calling on GAO to assess
compliance with required inflation adjustments as part of its annual agency
audits.

Requires nationwide coverage by
Cooperative Disability Investigations (CDI) units, jointly run by the Social
Security Administration (SSA) and the Office of the Inspector General (OIG),
and consisting of staff from local SSA offices, the OIG, State Disability
Determination Services (DDS), and local law enforcement. CDI units generally
investigate suspected fraud before benefits are awarded.

Sec. 812. Exclusion of
certain medical sources of evidence

Prevents evidence submitted
by unlicensed or sanctioned physicians and health care providers from being
considered when determining disability. (Effective for determinations made on
or after one year after enactment)

Sec. 813: New and stronger
penalties

Creates a new specific felony
for conspiracy to commit Social Security fraud, punishable by up to 5 years in
prison, fines generally up to $250,000, or both. Increases the maximum felony
penalty from 5 years to 10 years for individuals in positions of trust
(including claimant representatives, doctors and other health care providers,
translators, and current or former SSA employees) who use their specialized
knowledge to defraud the SSA, in addition to fines (generally up to $250,000).

Increases the maximum Civil
Monetary Penalty (CMP) that the SSA can levy against individuals in a position
of trust from $5,000 to $7,500 for each false statement, representation,
conversion, or omission the individual makes or causes to be made.

Disqualifies individuals from
receiving benefits during a trial work period if they are assessed a CMP for
fraudulently concealing work activity. (All provisions effective upon
enactment)

Sec. 814. References to
Social Security and Medicare in electronic communications

Clarifies that the
prohibitions and penalties contained in Section 1140 of the Social Security Act,
regarding the misuse of symbols, emblems, and names associated with Social
Security and Medicare, also apply to electronic and Internet communications,
and treats each Internet viewing as a separate offense. (Effective upon
enactment)

Sec. 815. Change to cap
adjustment authority

Increases the level of the
cap adjustment spending for program integrity as allowed under the Budget
Control Act. Additional funding totals $484 million FY 2017-2020. Expands the
use of funds to include CDI units, Special Assistant United States Attorneys
who prosecute Social Security fraud, and work-related continuing disability
reviews.

Reinstates the Social
Security Administration’s demonstration authority through December 31, 2021 and
requires all projects using the authority to terminate on December 31, 2022.

Sec. 822. Modification of demonstration
project authority.

Updates requirements for the
Congressional review period, under which the Commissioner must notify Congress
in advance of any experiment or demonstration project conducted under this
authority. Requires additional information to be sent to the Committee on Ways
and Means and Committee on Finance prior to beginning. The proposal must now
include a description of objectives, expected annual and total costs, start
date, and end date. Specifies that participation in demonstration projects is
voluntary and requires informed consent.

Sec. 823. Promoting
opportunity demonstration project.

Requires the Social Security
Administration to test the effect on beneficiary earnings of changing how
earnings are treated for purpose of ongoing benefit eligibility. Under the
demonstration, the existing “cash cliff” would be replaced with a benefit
offset, under which the DI benefit would be reduced by $1 for every $2 of
earnings in excess of a threshold. The SSA could test multiple thresholds at or
below the current level of earnings that constitute a trial work month ($780 in
2015). Under the demonstration, there would be no trial work period and no
extended period of eligibility, but beneficiaries could receive partial
benefits if their earnings in a month exceeded the substantial gainful activity
amount ($1,090 a month in 2015). In addition, the threshold amount could be
adjusted upward to reflect an individual’s itemized Impairment Related Work
Expenses. Once an individual’s benefit is fully offset, entitlement to benefits
would end, but Medicare coverage would continue for 93 months.

Sec. 824. Use of
electronic payroll data to improve program administration

Authorizes Social Security to
obtain, with beneficiary consent, data on beneficiary earnings from payroll
providers and other commercial sources of earnings data through a data
exchange. Individuals for whom the SSA obtains earnings data from these sources
would be exempt from the requirement to report their own earnings. The SSA would
be required to publish regulations governing this process prior to
implementation. (Effective one year after enactment)

Sec. 825. Treatment of
earnings derived from services.

When a DI beneficiary works,
the SSA must consider which month the income was earned in determining whether
the individual’s earnings exceed the Substantial Gainful Activity amount. The
SSA would be permitted to streamline the process of evaluating a beneficiary’s
earnings by presuming that wages and salaries were earned when paid, unless
information was available to the SSA that showed when the income was earned.
Beneficiaries would receive a notification

9

when such presumption is made, and
afforded an opportunity to provide additional wage information regarding when
the services were performed. (Effective upon enactment)

Sec. 826. Electronic
reporting of earnings.

Requires the SSA to permit DI
beneficiaries to report their earnings via electronic means, including
telephone and internet, similar to what is available to Supplemental Security
Income recipients. (Effective not later than September 30, 2017)

Closes several loopholes in Social
Security’s rules about deemed filing, dual entitlement, and benefit suspension
in order to prevent individuals from obtaining larger benefits than Congress
intended. (Effective for individuals who attain age 62 after 2015, with respect
to dual entitlement and deemed filing; and effective for benefits payable
beginning 6 months after enactment, with respect to benefit suspension.)

Sec. 832. Requirement for
medical review.

In order to make an initial
determination of disability, the Commissioner must make every reasonable effort
to ensure that a qualified physician, psychiatrist or psychologist has
completed the medical portion of the case review. (Effective for determinations
made beginning one year after enactment)

Sec. 833. Reallocation of
payroll tax revenue.

Reallocates to the Disability
Insurance Trust Fund an additional 0.57 percentage points (for a total of 2.37
percentage points of the total combined 12.4 percent payroll tax) in 2016, 2017
and 2018. This would be sufficient to pay benefit until 2022, and the total
rate would not change.

Sec. 834. Access to
financial information for waivers and adjustments of recovery

When an individual requests
waiver of an overpayment because they are without fault and are unable to repay
the funds, the SSA would be permitted to verify their financial information
using its Access to Financial Institutions system (which provides data on
beneficiary financial accounts). (Effective for determinations made 3 months
after enactment)

Under current law, the Office
of Personnel Management (OPM) must reduce disability payments made to a Federal
Employee Retirement System (FERS) annuitant who also receives

10

Social Security disability
benefits. In some cases, OPM pays the FERS annuity before the SSA has
determined whether the annuitant is also entitled to Social Security
disability, resulting in a FERS overpayment. SSA would be permitted to repay
OPM the amount of overpaid FERS benefits if an individual is found eligible for
DI and is entitled to an award of past-due benefits, and deduct this overpaid
amount from the past-due Social Security payment. This shall apply to past-due
disability insurance benefits payable 1 year after enactment.

Sec. 842. Elimination of
quinquennial determinations relating to wage credits for military service prior
to 1957.

Eliminates the requirement
that the SSA make quinquennial determinations for pre-1957 military service
wage credits after the 2010 determination; the trust funds have been reimbursed
for all costs attributable to granting these wage credits.

Sec. 843. Certification of
benefits payable to a divorced spouse of a railroad worker to the Railroad
Retirement Board.

Adds divorced spouses to the
list of beneficiaries whose information is certified electronically.

Sec. 844. Technical
amendments to eliminate obsolete provisions.

Technical change to remove
subsections 226(j) and 226A(c) which are obsolete.

Sec. 845. Reporting
requirements to Congress.

Requires the SSA to report
on:

1.Fraud
Prevention Activities and Improper Payments

2.Work-Related
Continuing Disability Reviews

3.Overpayment
Waivers

Sec. 846. Expedited
examination of Administrative Law Judges

SSA hires new ALJs through
the Office of Personnel Management, which holds periodic examinations for
potential ALJ candidates. SSA would be allowed to request additional
examinations for Administrative Law Judges (ALJs) when the need arises.

Subsection 901(a) provides
for the temporary suspension of the limit on public debt through March 15,
2017. Subsection 901(b) further provides that on March 16, the public debt
limit will be increased, but only to the extent that: (1) the face amount of
obligations issued and the face amount of obligations whose principal and
interest are guaranteed by the federal government (except guaranteed
obligations held by the Secretary of the Treasury) outstanding on March 15,

11

2017, exceeds (2) the face
amount of such obligations outstanding on the date of enactment of this Act.

Sec. 902. Restoring
Congressional Authority Over the National Debt.

Subsection 902(a) limits the
adjustment under section 901(b) by prohibiting an obligation from being taken
into account unless its issuance was necessary to fund a commitment incurred by
the federal government that required payment before March 16, 2017.

Subsection 902(b) prohibits
the Secretary of the Treasury from abusing the suspension of the debt ceiling
to build up cash balances above normal operating balances.

Title X – Spectrum

Sec. 1001. Short title.

This section establishes the short
title of this tile as the “Spectrum Pipeline Act of 2015.”

This section requires the
NTIA to identify 30 MHz of spectrum below 3 GHz (excluding 1675- 1695 MHz) by
2022 in preparation for an auction by the FCC no later than July 1, 2024.

Requires the FCC to hold said
auction.

Sec. 1005. Additional Uses
of Spectrum Relocation Fund.

This section expands the
eligible uses of the Spectrum Relocation Fund to include research and
development of spectrum technologies and systems to improve government spectrum
efficiency. It also allocates $500 million for such purposes and includes
ongoing funding of 10% of funds deposited in the SRF. This funding will
increase the ability of the Federal government to identify opportunities for
spectrum reallocation and sharing with commercial systems.

Entities requesting funds
from OMB must submit a plan to the technical panel established under the Middle
Class Tax Relief and Job Creation Act of 2012 in order to make a determination
whether the plan is likely to produce tangible positive results.

Sec. 1006. Plans for
Auction of Certain Spectrum.

Establishes a series of
reports from the FCC to Congress detailing new opportunities to reallocate
spectrum from government to commercial or shared use.

Three different regimes
currently exist for auditing partnerships. For partnerships with 10 or fewer
partners, the IRS generally applies the audit procedures for individual
taxpayers, auditing the partnership and each partner separately. For most large
partnerships with more than 10 partners, the IRS conducts a single
administrative proceeding (under the so-called TEFRA rules, which were adopted
as part of the Tax Equity and Fiscal Responsibility Act of 1982) to resolve
audit issues regarding partnership items that are more appropriately determined
at the partnership level than at the partner level. Under the TEFRA rules, once
the audit is completed and the resulting adjustments are determined, the IRS
must recalculate the tax liability of each partner in the partnership for the
particular audit year.

A third audit regime applies
to partnerships with 100 or more partners that elect to be treated as Electing
Large Partnerships (ELPs) for reporting and audit purposes. A distinguishing
feature of the ELP audit rules is that unlike the TEFRA partnership audit
rules, partnership adjustments generally flow through to the partners for the
year in which the adjustment takes effect, rather than the year under audit. As
a result, the current-year partners’ share of current-year partnership items of
income, gains, losses, deductions, or credits are adjusted to reflect
partnership adjustments relating to a prior-year audit that take effect in the
current year. The adjustments generally do not affect prior-year returns of any
partners (except in the case of changes to any partner’s distributive share).

Under the provision, the
current TEFRA and ELP rules would be repealed, and the partnership audit rules
would be streamlined into a single set of rules for auditing partnerships and
their partners at the partnership level. Similar to the current TEFRA rule
excluding small partnerships, the provision would permit partnerships with 100
or fewer qualifying partners to opt out of the new rules, in which case the
partnership and partners would be audited under the general rules applicable to
individual taxpayers.

Under the streamlined audit
approach, the IRS would examine the partnership’s items of income, gain, loss,
deduction, credit and partners’ distributive shares for a particular year of
the partnership (the “reviewed year”). Any adjustments would be taken into
account by the partnership (not the individual partners) in the year that the
audit or any judicial review is

13

completed (the “adjustment year”). Partners would
not be subject to joint and several liability for any liability determined at
the partnership level. Partnerships would have the option of demonstrating that
the adjustment would be lower if it were based on certain partner-level
information from the reviewed year rather than imputed amounts determined
solely on the partnership’s information in such year. This information could
include amended returns of partners opting to file, the tax rates applicable to
specific types of partners (e.g., individuals, corporations, tax-exempt
organizations), and the type of income subject to the adjustment (e.g.,
ordinary income, dividends, capital gains). As an alternative to taking the
adjustment into account at the partnership level, a partnership would be permitted
to issue adjusted information returns (i.e., adjusted Form K-1s) to the
reviewed year partners, in which case those partners would take the adjustment
into account on their individual returns in the adjustment year through a
simplified amended-return process. As a result, partnerships generally would no
longer issue amended Form K-1s after the partnership return is filed, but
instead would use the adjusted Form K-1 process.

A partnership would also have
the option of initiating an adjustment for a reviewed year, such as when it
believes additional payment is due or an overpayment was made, with the
adjustment taken into account in the adjustment year. The partnership generally
would be permitted to take the adjustment into account at the partnership level
or issue adjusted information returns to each reviewed-year partner. The
provision would be delayed for two years, so that it applies to returns filed
for partnership tax years beginning after 2017.

Sec. 1102. Partnership
Interests Created By Gift.

A partnership generally is an
unincorporated organization in which the parties (typically referred to as
partners) have joined together with the purpose of conducting an active trade
or business. A person also may be recognized as a partner if capital is a material
income-producing factor, whether such interest was obtained by purchase or by
gift. Congress intended this rule to clarify that a family member who receives
via gift a capital interest in a partnership, where capital is a material
income-producing factor, should be respected as a partner in the partnership
and should be taxed on the income from that partnership. Some taxpayers have
argued that this family partnership rule provides an alternative test for
determining who is a partner without regard to how the term is generally
defined in the partnership tax rules. Thus, they assert that if a partner holds
a capital interest in a partnership, the partnership must be respected
regardless of whether the parties have demonstrated that they joined together to
conduct an active trade or business.

The provision would clarify
that Congress did not intend for the family partnership rules to provide an
alternative test for whether a person is a partner in a partnership. The
determination of whether the owner of a capital interest is a partner would be
made under the generally applicable rules defining a partnership and a partner.
In addition, the family partnership rules would be clarified to provide that a
person is treated as a partner in a partnership in which capital is a material
income-producing factor whether such interest was obtained by purchase or gift
and regardless of whether such interest was acquired from a

14

family member. The rule, therefore, is a
general rule about who should be recognized as a partner.

Title XII – Designation of
Small House Rotunda Sec. 1201. Designating Small House Rotunda as “Freedom
Foyer”.

This section designates the
first floor area of the House of Representatives wing of the U.S. Capitol known
as the small House rotunda as “Freedom Foyer.” Busts of Winston Churchill,
Lajos Kossuth, and Vaclav Havel are on display in the Freedom Foyer.

A
large majority of employers expect the ACA's ‘Cadillac tax' to impact their
plans, but many of those employers haven't calculated when the tax will hit
their plans or taken steps to reduce generous benefits to avoid it,...

Republican presidential candidates' rationale for raising the
retirement age, that we're all living longer, holds true for those with
multiple diplomas, homes in safe neighborhoods and a plan for golden-age
leisure. In other words, for the wealthy.

For the poor, research shows that as incomes have stagnated, so have
life expectancies.

Candidates Chris Christie, Ben Carson, Jeb Bush and Marco Rubio all
support raising the age. Democrats tend to oppose their premise that Social
Security is in crisis, and that working longer is a fair way to fix it. Lifting
the age from 67, an idea pushed for years to bolster Social Security, would
affect Americans in dramatically different ways depending on their wealth.
Forcing the poor, who die younger, to work longer threatens to make a lengthy
retirement a perk reserved only for the prosperous.

Central States Pension Fund Submits Plan for Reducing
Benefits
"Within 30 days of receiving an application to suspend benefits, Treasury will
publish the Rescue Plan and request comments from contributing employers,
unions, participants and other parties.... Treasury must approve or deny
Central States' application within 225 days of the submission.... Within 30
days of an application's approval, the IRS must administer a vote for
participants and beneficiaries to approve or reject the proposed benefit
suspensions.... If a majority of participants and beneficiaries vote to reject
the suspension, the plan sponsor may again apply for benefit suspensions....
[B]ased on the filing date for the Rescue Plan, if it
is approved, it would be implemented on or around July 1, 2016." (McGuireWoods LLP)

Pension Fund May Cut Benefits for 273,000 Workers and
Retirees
"The proposal, which still needs approval from the Treasury Department,
will spare retirees age 80 or older from any cuts as well as anyone receiving
disability protections. And reductions would be less severe for those older
than 75 or widows and widowers receiving spousal benefits. While they vary,
cuts will average about 23% and could happen as soon as July." (CNNMoney.com)

Central States Pension Fund Prepares
to Slash Hundreds of Thousands of Workers' Pensions
"The cuts in monthly payments to workers covered by Central States will
vary from nothing (for about one-third of the group) to more than 60 percent
(the highest losses will be suffered by many in a group of about 28,400
Teamsters whose employers had abandoned their employees, usually via bankruptcy
and closure). The average loss for all participants will be 22.6 percent of
retirement pay on which they had counted, according to the summary prepared by
the fund trustees." (In These Times)

United
Refining Co. today lost its bid to have the U.S. Supreme Court review a
decision awarding higher pension benefits to a class of the company's retirees.

The
case involved United Refining's decision to reinterpret its pension plan in a
way that provided lower benefit levels to retirees. The retirees alleged that
this reinterpretation actually constituted a plan amendment that slashed their
benefits in violation of the Employee Retirement Income Security Act's rule
prohibiting cutbacks of accrued pension benefits.

Did Volkswagen
deceive the US government to secure tax breaks? The German automaker, along with
other auto manufacturers, lobbied for $50 million in
tax breaks to help market its diesel cars. If they planned to
trick US authorities, VW executives could be charged with criminal tax fraud.
The US could also bring a claim against VW under the False Claims Act. Firms are not allowed to lie to the US (by manipulating
software to allow a vehicle to pass an emissions test) in order to obtain a
government benefit (a tax credit for a low-emissions alternative fuel vehicle).

The Teamsters Central States, Southeast & Southwest Areas
Pension Fund, Rosemont, Ill., is seeking permission to cut benefits for
participants, including retirees, as part of a proposed rescue plan awaiting
approval from the Treasury Department. The pension fund had assets of $17.8
billion as of Dec. 31, and is projected to become insolvent in 2026.

Starting
in July, accounting and consulting firm PricewaterhouseCoopers will offer some
employees a practical perk: $1,200 a year for up to six years toward their
student debt. ...

The Millennial Journey from Saving to Retirement
(PDF)
16-page executive summary. "[M]illennials are
often inclined to hold more cash than prior generations, are less likely to
marry or own a home, and will increasingly finance their own retirements due to
declining availability of defined benefit pension plans. Given rising life
expectancies, their retirements may be longer than their working years ... How
can median-income millennials do it? It starts with a plan to put 4%-9% of
pre-tax income into retirement accounts each year, starting at age 25. For
affluent millennials, the range would be 9%-14%; and for high net worth
millennials, 14%-18%." [Also available: 72-page full report.]
(J.P. Morgan Asset Management)

In a
newly released study, Caleb Quakenbush and I find
that a typical couple retiring today is scheduled to receive about $1 million
in cash and health benefits; many millennials will receive $2 million or more.
In effect, we’ve now scheduled many young adults to be future Social Security
and Medicare bi-millionaires.

Kelsey-Hayes
Co. must restore lifetime health benefits to a class of about 100 retirees and
surviving spouses because the automotive brake manufacturer violated the terms
of a collective bargaining agreement when it replaced the benefits with a less
favorable health insurance system, a federal judge in Michigan rules. ... More »

Here's How Wide the Retirement Gap Is Between Men and
Women
"Financial Finesse, which provides financial education programs to more
than 600 organizations, examined data on median income, retirement savings,
life expectancy, 401(k) salary deferral rates, and projected health-care costs
for a woman and a man, each 45 years old. The goal: Figure out how much each
needed in order to retire at age 65 and live on 70 percent of his or her
pre-retirement income. The gap that emerged between the sexes: 26 percent. A
man's retirement shortfall was more than $212,000. A woman's? More than
$268,000." (Bloomberg)

The proportion of Americans who lack health insurance took a
big dip last year, with nearly 9 million people gaining coverage since 2013, according
to federal figures announced Wednesday. The figures from an annual Census
survey found that the share of people across the country who were uninsured
fell from 13.1 percent in 2013 to 10.4 percent last year.

Here's How Wide the Retirement Gap Is Between Men and
Women
"Financial Finesse, which provides financial education programs to more
than 600 organizations, examined data on median income, retirement savings,
life expectancy, 401(k) salary deferral rates, and projected health-care costs
for a woman and a man, each 45 years old. The goal: Figure out how much each needed
in order to retire at age 65 and live on 70 percent of his or her
pre-retirement income. The gap that emerged between the sexes: 26 percent. A
man's retirement shortfall was more than $212,000. A woman's? More than
$268,000." (Bloomberg)

How Pension Plans Can Adapt to a New Normal of Low
Returns
"Whereas many pensions have embraced liability-driven investing in recent
years, asset-liability mismatches remain. A rise in long-term bond yields would
allow pension investors to close duration gaps at higher levels of funding. But
what if it turns out that we're in an environment of lower yield and lower
returns for longer than we expected? What if the slow rates of real and nominal
growth we have experienced since the 2008-09 financial crisis are reflective of
long-term secular trends?" (Institutional Investor)

Public Pension Funds Roll Back Return Targets
"New upheavals in global markets and a sustained period of low interest
rates are forcing officials who manage retirements for nearly 20 million U.S.
beneficiaries to abandon a long-held belief that stocks, bonds and other
holdings would earn 8% each year, as well as expectations that those gains
would fund hundreds of billions of dollars in liabilities.... More than
two-thirds of state retirement systems have trimmed assumptions since 2008 ...
On [September 4], the New York State Common Retirement Fund, the
third-largest public pension by assets, said it plans to drop its assumed
returns to 7% from 7.5% after cutting a half-percentage point five years
ago." (The Wall Street Journal; subscription may be required)

The World's 300 Largest Pension Funds at Year End
2014
"[T]he world's top 300 pension funds now represent around 43% of global
pension assets. Total assets of the world's largest 300 pension funds grew by
over 3% in 2014 (compared to around 6% in 2013). By individual region North
America had the highest five-year combined compound growth rate of around
8%." (Towers Watson)

The IRS' decision to stick with 15-year-old mortality
assumptions will save corporate defined benefit plan sponsors at least $18
billion in contributions in 2016 and be a credit positive for them, said a
report from Moody's Investors Service.

O'Malley:
Apply Payroll Tax on Higher IncomesTo pay for expanded Social Security benefits, the
payroll tax associated with the program should apply to wage income of more
than $250,000, former Maryland Gov. Martin O'Malley said August 21.

Treasury
Takes Action Against Inversions
In a much-anticipated notice, Treasury on September 22 took
administrative action against companies that invert by substantially reducing
the economic benefit to be gained from inverting and making inversions more
difficult to accomplish.

Current law: Under current law, discharge of indebtedness generally
constitutes taxable income. However, an exception applies to student loans that
are forgiven because the former students work for a period of time in certain
professions or for certain classes of employers. The exception also applies to
loan repayments as part of the National Health Services Corps Loan Repayment
Program and loan repayments or forgiveness under certain State loan repayment
programs intended to provide for increased health care services in certain
areas.

Provision: Under the provision, the exclusion for discharge of
student loan indebtedness would be repealed. The provision would be effective
for amounts discharged after 2014.

JCT estimate: According to JCT, the provision would increase
revenues by $1.1 billion over 2014-2023.

Social Security: How It Works
and How to Fix It, speech for an Internal
Revenue Service Office of Chief Counsel Professor in Residence lecture,
Washington, DC, October 13, 2009; for a Taxation and Fiscal Policy class at Dedman School of Law, Southern Methodist University,
Dallas, Texas, March 4, 2009; the Chandler Lions Club, Chandler, Oklahoma,
February 12, 2009; and for the John Marshal Law School, Employee Benefits Lunch
and Learn, Chicago, Illinois, April 24, 2008. PowerPoint
Presentation.

Q: What do accountants suffer from that ordinary people don’t?
A: Depreciation.

An
accountant tries horseback riding:

Yesterday I had
a near death experience that has changed me forever. I went
horseback riding. Everything was going fine until the horse starts bouncing
out of control. I tried with all my might to hang on, but was thrown
off. Just when things could not possibly get worse, my foot gets
caught in the stirrup. When this happened, I fell head first to the ground. My
head continued to bounce harder as the horse did not stop or even slow
down. Just as I was giving up hope and losing consciousness the Wal-Mart
manager came and unplugged it.

The doorbell,
rings, and a man answers it. Here stands this plain but well-dressed kid,
saying, “Trick or Treat!” The man asks the kids what he is dressed up like for
Halloween. The kid replies, “I’m an IRS agent.” Then he takes 40 percent of the
man’s candy, leaves, and doesn’t say thank you.

The tax lawyer looked down on the destroyed ruins of his car
and cried “My BMW! My BMW! It’s ruined!” When a passerby pointed out that he
had also lost his left arm in the crash, he moaned, “Oh no, not my Rolex too!”

Facebook CEO Mark Zuckerberg’s got the fame. He’s a
household name and an Andy Samberg character. He also made around $13 billion
in his company’s initial public offering last year. Now for the little
heartache: A tax bill
for one. Billion. Dollars.Jolie O'Dell, venturebeat.com,
3-28-13

IRS Video ScandalLooks like there's someone
at the IRS in need of some Spock logic. The tax collector with its hand
perpetually in your pocket is getting two thumbs down these days from spending
watchdogs for a "Star Trek"-themed training video that mostly just
trains anyone viewing it to wince. Bad script? Check. Bad per-diem jokes?
Check. Bad acting? Check. Good use of irony, though. The
accountants-turned-wooden-actors are heading to the planet "Notax." Alas, about $60,000 worth of tax dollars were
spent on this and a "Gilligan's Island" parody, which can't be a
comfort to anyone facing an IRS audit. MSN Now 3-24-13

And while I can understand the backlash against such
frivolous spending of taxpayer dollars by a government agency, this video
simply had to be made, because, you know, Star Trek. The link to the video is
below, and it’s both hilarious and depressing, sort of like when a clown dies.
Robert Wood, Forbes, 3-22-13 http://www.cbsnews.com/video/watch/?id=50143433n

The uproar over
the “Star Trek” parody is an example of the sort of moralistic nitpicking to
which the public sector is often subjected. It’s related to the lazy disdain in
which government employees are held by many politicians and taxpayers. You
could even say that bashing “bureaucrats” is the prime directive of populist
politics. Michael McGough’ Los Angeles Times, 3-27-13

But note
that the criticism of the IRS videos comes from our least productive government
employees, Congress. Robert McKenzie, 3-29-13

Suppose you
were an idiot. And suppose you were a member of Congress. But
then I repeat myself. -- Mark Twain

In my many years
I have come to a conclusion that one useless man is a shame, two is a law firm
and three or more is a Congress. -- John Adams

Talk is
cheap...except when Congress does it. – Anonymous

There is no
distinctly native American criminal class...save Congress.
-- Mark Twain

The fear of an
Internal Revenue Service audit ranks right with the fear of death, visiting the
dentist or speaking in public. Most taxpayers don’t know what an audit
involves, but they know they don’t want to find out.,
Mike McDevitt, 4-26-07, Colorado Springs Business Journal

An engineer dies and reports to the pearly gates. St. Peter checks his dossier
and says, “Ah, you’re an engineer. You’re in the wrong place.” So the engineer
reports to the gates of hell and is let in.

Pretty soon, the engineer gets dissatisfied with the level of comfort in hell,
and starts designing and building improvements. After a while, they’ve got air
conditioning and flush toilets and escalators, and the engineer is a pretty popular
guy.

One day God calls Satan up on the telephone and says with a sneer, “So, how’s
it going down there in hell?”

Satan replies, “Hey, things are going great. We’ve got air conditioning, flush
toilets, and escalators, and there’s no telling what this engineer is going to
come up with next.”

God replies, “What??? You’ve got an engineer? That’s a mistake. He should never
have gotten down there; send him up here.”

Satan says, “No way. I like having an engineer on the staff and I’m keeping
him.”

God says, “Send him back up here or I’ll sue.”

Satan laughs uproariously and answers, “Yeah, right. And just where are YOU
going to get a lawyer?”

No matter what, we will spend the
last five weeks (~15 classes) on Oil and Gas Taxation.Many of the remaining assignments refer
to Noah S. Baer, Oil and Gas Transactions
(BNA Portfolio 605-2d) [hereinafter “Baer”].It is freely available to you on-campus only (using your own laptop or a
school computer) at the following link:http://taxandaccounting.bna.com/btac/search/doccite_search/goto_portfolio.adp?fname=tm_605&vname=tmuspornr.(Right click on the page, and click on Create
a Shortcut to put it on your desktop.)Read the assigned material and generally read the linked worksheets,
Code, and regulation sections as they are referenced.

Anyone who
thinks the government is listening to their phone calls should try calling IRS
for tax help!

An investor
went to a tax expert and said: “If I give you $1,000, will you answer two
questions?”

The expert
replied: “Certainly. And what is the other question?”

What can we, as
citizens, do to reform our tax system? As you know, under our three-branch
system of government, the tax laws are created by: Satan. But he works through
the Congress, so that’s where we must focus our efforts. Dave Barry, Column,
April 6, 2003

I think that one of the scariest letters one can receive
is the one from the Internal Revenue Service. Greg Roberts, Aiken Standard,
3-3-13

California
levied the first jock tax in 1991, on athletes from Chicago, right after the
Chicago Bulls beat the L.A. Lakers. (Chicago quickly responded in kind.) Today,
most states with a professional sports team impose a jock tax. Jeanne Sahadi and Les Christie, CNN/Money 2-22-05

. The USA is a
big ol’ country and my hard-earned money helps with such groovy things as
superhighways, thermonuclear devices to protect us from rogue nations and anti-revolution
insurance. But I know I paid my taxes that year. Uncle Sam’s records said I’d
only paid a few hundred dollars but my records showed that I’d paid a few
thousand. Somewhere along the way someone, and it wasn’t me, left off a digit.
Grant McGee 8-13-10

When I was
young I used to think that money was the most important thing in life. Now that
I am old, I know it is. - Oscar Wilde

The chaplains
who pray for the United States Senate and the House of Representatives might
speak a word now and then on behalf of the taxpayers.

When the time
comes for the meek to inherit the earth, taxes will most likely be so high that
they won't want it.

A man dies and
goes to hell and is shocked to see his former tax lawyer entwined with a
beautiful woman while everyone else roasts in eternal flames. So he calls over
the nearest demon and asks how come the tax lawyer gets a girl while he just
gets fried. The demon glances over and shouts “Who are you to question that
woman’s punishment?”

A Florida tax
attorney recently died and his brother, a physician, gave the eulogy. He stated
that it had been said that nothing was certain but death and taxes, but his
brother had successfully beaten taxes on many occasions but he still could not
beat death. Told to me by Martin Press, tax controversy lawyer. 2-27-13

Doing your own
income tax return is a lot like a do it yourself mugging.

Isn’t it
appropriate that the month when the taxes are due begins with April Fool’s Day and ends with cries of “May Day!”?

This year,
there are some major changes that you, as a taxpayer, should be aware of,
unless—to quote Internal Revenue Service Commissioner Charles Rossotti, in his annual Message To Taxpayers—“you wish to
become roommates with a federal-prison inmate who weighs 400 pounds and likes
to dress you up as Tinkerbell.” Dave Barry 4-10-2002

The fourth of
July, 1776 - that's when we declared our freedom from unfair British taxation.
Then, in 1777, we started our own system of unfair taxation.

Ode To Prosperity

By Madeleine
Begun Kane

The
affluent prosper quite well,

As
their savings continue to swell.

It
is great to be rich.

Destitution’s
a bitch.

You
might say that it’s taxing as hell.

A man, called to an IRS audit, asked his accountant for advice on what to wear.
“Wear your shabbiest clothing. Let him think you are a pauper.”

Then
he asked his lawyer the same question, but got the opposite advice. “Do not let
them intimidate you. Wear your most elegant suit and tie.

Confused, the man went to his rabbi, told him of the conflicting advice, and
requested some resolution of the dilemma.

“Let
me tell you a story,” replied the rabbi. “A woman, about to be married, asked her
mother what to wear on her wedding night. ‘Wear a heavy, long, flannel
nightgown that goes right up to your neck.’ But when she asked her
best friend, she got conflicting advice: ‘Wear your most sexy negligee, with a
V neck right down to your navel.

The
man protested, “What does all this have to do with my problem with the IRS?”

“No
matter what you wear, you are going to get screwed.”

“A tax shelter is a dumb transaction done by
smart people that will put my kids through college.” Chuck Rettig,
tax controversy lawyer, at a 2005 tax conference.

Ambition in
America is still rewarded . . . with high taxes.

America is the
land of opportunity. Everybody can become a taxpayer.

Of course you
can't take it with you, and with high taxes, lawyer's fees, and funeral
expenses you can't leave it behind either.

Q: How do you
humble a person that flaunts their wealth?

A: Have them
fill out a tax return.

One tax
resolution firm says in an ad that the IRS "is the most brutal collection
agency on the planet." Good, it should be. Ken Herman, Statesman.com,
April 14, 2012

Attention,
millionaires, the watchful eye of the Internal Revenue Service is trained on
you. During last year's tax season, 30 percent of multimillionaires were audited,
the agency said. Overall, just 1.1 percent of individual income tax returns
were checked. Tiffany Hsu - Los Angeles Times 3-23-12

In the current
political climate, taxes have been so demonized that many citizens regard
taxation itself as wrongful. And if people believe that taxation itself is
wrongful, then it would seem to follow that such people would also believe that
the failure to pay taxes is not wrongful.. Stuart P.
Green, CNBC Blog, 4-11-11

On lawyers:
"Ignorance of the law is no excuse not to practice.
" — Conrad Teitell

A tough old
cowboy from south Texas counseled his grandson that if he wanted to live a long
life, the secret was to sprinkle a pinch of gunpowder on his oatmeal every
morning.

The grandson
followed this advice religiously until the day he died at age 103.

He left behind
14 children, 30 grandchildren, 45 great-grandchildren, 24
great-great-grandchildren, and a 15-foot hole where the crematorium used to be.
Courtesy of Michael Lied

If the U.S.
Internal Revenue Service ever asks me to defend anything I declared or exempted
or deducted or itemized, I’ll just sigh, take out my wallet, and start handing
them twenties until they stop talking. Joel Stein, Bloomberg BusinessWeek,
4-5-12

The odds of
winning the $640-million "Mega Millions" lottery are estimated to be
175 million-to-1, according to its sponsors, but for the Internal Revenue
Service, it's a sure thing. Patrick Temple-West, Reuters, 3-30-12

At the time of
record deficits some of our Congressmen seek to increase the deficit by
introducing legislation allowing deductions for pets. “H.R. 3501, was
introduced as the “Humanity and Pets Partnered Through
the Years” (HAPPY Act) and would allow deductions of up to $3,500 a year for
pet expenses. It was introduced by Michigan Rep. Thaddeus McCotter
and co-sponsored by Rep. Steve Cohen of Tennessee and Rep. Jared Polis of
Colorado.” Robert W. Wood, Forbes.com, 4-2-12. My question is :
Who are the 13% of Americans who approve of the way Congress is doing its job?

Most of us treat the Internal Revenue Service as if it were
an ancient and powerful god. We pay tribute through payroll deduction. We
perform the annual ritual of the tax forms. We bring forth sacrifices and
homage on its chosen day of April 15. We dread provoking its wrath. Jim
Gallagher ST. LOUIS POST-DISPATCH 2-14-10

So the I.R.S. is
like a street cop or, more precisely, the biggest fleet of street cops in the
world, who are asked to enforce laws written by a few hundred people on behalf
of a few hundred million people, a great many of whom find these laws too
complex, too expensive and unfair. Stephen J. Dubner and Steven D. Levitt |
April 2, 2006

Two guys walked
into a bar late one afternoon and noticed that, among the few customers, was
one guy sitting quietly in the shadows at the end of the bar. The two ordered
some beers. The bartender brought them and said, “that
will be 50 cents please.” They started a tab and a short time later ordered two
more beers and again they were charged 25 cents each. The two could not believe
the good deal and after having a third beer for the same price, they decided to
ask the bartender what the catch was. The bartender replied, “there is no catch, gentlemen. I have just started brewing
this beer on site and I am selling it below cost to introduce it to my
customers. I am happy to see that you enjoy the beer.”

Indeed, they noticed that almost everyone was
enjoying the beer and the remarkable price except for the one man at the end of
the bar. He had not ordered anything since the two came in. Becoming very
curious about the guy at the end of the bar, the two asked the bartender,
“Doesn’t he ever order anything?” “Oh yes,” said the bartender. “That is SamSmith our local
tax preparer. He is just waiting for happy hour.”

Late one night a
mugger wearing a ski mask jumped into the path of a man and stuck a gun in his
ribs. “Give me your money,” he demanded.

No suit shall be
maintained in any court for the purpose of restraining the assessment or
collection (pursuant to the provisions of chapter 71) of—

(1)the amount of the liability, at law or in
equity, of a transferee of property of a taxpayer in respect of any internal
revenue tax, or

(2)the amount of the
liability of a fiduciary under section 3713(b) of title 31,
United States Code [1] in respect of
any such tax.

When you do a
good deed, get a receipt in case Heaven is like the IRS.

I recently
heard a CPA remark that the only accounting principle which the Internal
Revenue Service regards as “generally accepted” is “A bird in the hand is worth
two in the bush.” Although my friend overstates his case a bit -- quite a bit
-- I cannot dismiss the thrust of his comment without some soul searching.
--Sheldon S. Cohen

There're only
two people who ever have understood the Internal Revenue Code in its
entirety.One is dead, and the other
still is in therapy. Sent to me by Leonard W. Williams, CPA

FOIA

A man made a
Freedom of Information request to the IRS , asking
whether there was an audit file on him.

A week later he
received the reply. It said: “There is now.”

What do you
call a lawyer with a 40 IQ? “Your Honor.”

TWO QUESTIONS

An investor
went to a tax accountant and said: “If I give you $1,000, will you answer
two questions?” The accountant replied: “Certainly. And what is the other
question?”

A financial
planner suggested to a wealthy client that he should invest in a
circus. The client expressed great surprise at such an unusual
recommendation: “A circus? Why on earth should I buy into a circus?” The
financial planner replied: “Because of the elephants.” The client, puzzled
even more, then asked: “The elephants? What is the connection between circus
elephants and investments?” The financial planner asked: “Well, do you
know how much it costs to feed an elephant?” The client, slightly annoyed,
responded: “No, of course I do not know much it costs to feed an
elephant.” The financial planner explained: “Well, neither does the IRS
Commissioner.”

A businessman on his deathbed called his
friend and said, “Bob, I want you to promise me that when I die you will have
my remains cremated.” Bob agreed to take of his friend’s request and
asked “What do you want me to do with your ashes?” The businessman
said, “Just put them in an envelope and mail them to the Internal Revenue
Service and write on the envelope, “Now you have everything.”

The most successful tax lawyer in town
had never made a contribution to the Red Cross. The chairman of the Red Cross,
Mr. Wilson, called on the lawyer, hoping to convince him to make a
donation.“You made over $600,000 last
year but you haven’t given anything back to the community.How do you reconcile that?” The lawyer
sighed, leaned forward and said, “If you only knew... My mother is
terminally ill; her medical bills far exceed her income.My brother is a disabled veteran, blind and
in a wheelchair.My sister is raising three
children alone since her husband died in an auto accident.” Mr. Wilson
offered his sympathy, admitting he had no idea there were so many demands on
the lawyer’s profits. The tax lawyer nodded and said, “Exactly...Why
should I give to the Red Cross when I don’t even give to my own family!”

IRS
Memo Indicates Civil Unions Are Marriages for Federal Tax PurposesAn August 30 memo from the IRS Office of Associate
Chief Counsel (Procedure and Administration) seems to say that an Illinois
civil union is a marriage for federal tax purposes, permitting the parties to
file federal tax returns as married filing jointly even if they are the same
sex.

The
Oklahoma City Tax Lawyers Breakfast is pleased to announce that the Honorable
L. Paige Marvel, United States Tax Court, will be the speaker at the breakfast
meeting scheduled for 7:30 a.m., Wednesday, November 2, 2011. I would
like to invite all members, all Oklahoma tax practitioners, and those attorneys
having cases on the October 31, 2011 Tax Court Calendar to attend this
breakfast meeting with Judge Marvel.

The breakfast
meeting will be at the Cattlemen's Steakhouse, 1309 S. Agnew. Breakfast
will include a buffet of scrambled egg, biscuits and gravy, breakfast potatoes,
bacon, sausage, fresh fruit, and coffee. There will be a charge of $10.00
for non-members of the Oklahoma City Tax Lawyers Breakfast group to defray the
cost of the buffet.

The Tax Court Trial Calendar date
is October 31 and the call starts at 10 am. The address is Room 402 in
the Federal Building and Courthouse at 200 N. W. 4th Street in OKC. As you
probably know, the call of the calendar usually is concluded around the
lunch hour, the trial schedule is set and announced, there is generally a
lunch break, then several of the simpler cases are disposed of in the
afternoon.

Sooner Express Bus # 24 leaves from
the South Oval, stops at Homeland on 24th and Robinson in Norman.If students don't want to drive and park
the bus will get them here and back. There are three runs in
the morning, one of which arrives right around 9 am - and three in the
afternoon/evening - leaving at 3:00, 4:50 and
5:30.

Claims
Court Dismisses Couple's Refund Claim for Lack of Jurisdiction
The Court of Federal Claims dismissed for lack of jurisdiction a couple's claim
for a refund for the 1995 tax year stemming from a net operating loss carryback
related to their investment in a Hoyt cattle breeding partnership because they
failed to fully pay their tax liability for that year.

At IRS.gov, you will find a wealth of valuable information. The
“Basic Tools for Tax Professionals” page contains specific information for tax
professionals about tax law updates, their responsibilities as a tax
professional and frequently used telephone numbers.

In news analysis, Jeremiah Coder examines
recent steps the IRS has taken to strengthen the independence of the Office of
Appeals and whether those efforts are enough to reduce taxpayers' concerns
about outside influence on the organization.

DEAN, Special
Trial Judge: This case was heard pursuant to the provisions of section 7463
of the Internal Revenue Code in effect when the petition was filed. Pursuant to
section 7463(b), the decision to be entered is not reviewable by any other
court, and this opinion shall not be treated as precedent for any other case.
Unless otherwise indicated, subsequent section references are to the Internal
Revenue Code in effect for the year in issue, and all Rule references are to
the Tax Court Rules of Practice and Procedure.

Respondent
determined a deficiency of $3,892 in petitioners' Federal income tax for 2005.
The issue for decision is whether petitioners are liable for unreported
discharge of indebtedness (DOI) income.

BACKGROUND

Some of the facts have been stipulated and are so found. The stipulation of
facts and the attached exhibits are incorporated herein by reference.1
Petitioners resided in New York when they filed their petition.

During the
year in issue Thomas F. Liotti (petitioner) was an
attorney in New York. At the time of trial petitioner was admitted to practice
before this Court. He had held a credit card account with MBNA America Bank
N.A. (MBNA) since 1985. Petitioner's account was sponsored by the New York
State Bar Association; his name was the only name on the account. At the time
of trial petitioner had not used the account for several years. Over the course
of 2004 and 2005 petitioner sent letters to MBNA in which he discussed the
amount he felt he rightfully owed. There are no responses from MBNA to
petitioner's letters in the record. At some point in 2005 petitioner and MBNA agreed
that petitioner would pay $5,200 to settle his account. Petitioner made the
final payment toward the settlement in July 2005. Petitioner's credit card
statement with a closing date of September 21, 2005, reflects a finance charge
adjustment of $244.47 and a "charge off" of $11,974.65. MBNA provided
the Internal Revenue Service a Form 1099-C, Cancellation of Debt, which
reflected a cancellation of petitioner's debt of $11,974.65 for 2005.
Petitioner denied that he received a Form 1099-C from MBNA for 2005.

Petitioners
did not include the $11,974.65 as income on their 2005 joint Federal income tax
return. Respondent sent petitioners a notice of deficiency that included the
$11,974.65 in petitioners' income for 2005 and determined a deficiency of
$3,892.2After the notice was issued,
petitioner paid the tax and interest shown due on the notice.3

DISCUSSION

I. Burden of Proof and Production

Generally, the Commissioner's determinations are presumed correct, and the
taxpayer bears the burden of proving that those determinations are erroneous.
Rule 142(a); see INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch
v. Helvering, 290 U.S. 111, 115 (1933). The
burden of proof for factual matters may be shifted to the Commissioner under
section 7491. Petitioner has not alleged that section 7491 applies.

If an
information return, such as a Form 1099-C, is the basis for the Commissioner's
determination of a deficiency, section 6201(d) may apply to shift the burden of
production to the Commissioner if in any court proceeding the taxpayer asserts
a reasonable dispute with respect to the income reported on the information
return and the taxpayer has fully cooperated with the Commissioner. See McQuatters v. Commissioner, T.C. Memo.
1998-88. As discussed infra, petitioner has
failed to assert a reasonable dispute with respect to the income reported on
the Form 1099-C.

Thus there
is no burden shift under either section 7491 or 6201(d).

II. DOI Income

Gross income includes all income from whatever source derived. Sec. 61(a). DOI is specifically included as an item of gross
income. Sec. 61(a)(12). This means that a taxpayer who
has incurred a financial obligation that is later discharged or released has
realized an accession to income. Id.; United States v. Kirby Lumber
Co., 284 U.S. 1, 3 (1931). The rationale of this principle is that the
discharge of a debt for less than its face value accords the debtor an economic
benefit equivalent to income. United States v. Kirby Lumber Co., supra
at 3; Friedman v. Commissioner, 216 F.3d 537, 545 (6th Cir. 2000), affg. T.C. Memo. 1998-196. Accordingly,
when a taxpayer's obligation to repay a debt is settled for less than the face
value of the debt, he ordinarily realizes DOI income. Sec. 61(a)(12); see Warbus v.
Commissioner, 110 T.C. 279, 284 (1998) (citing Vukasovich,
Inc. v. Commissioner, 790 F.2d 1409, 1413-1414 (9th Cir. 1986), affg. in part and revg. in part
T.C. Memo. 1984-611). Accrued interest that is discharged through a settlement
is considered DOI income. Payne v. Commissioner, T.C. Memo. 2008-66, affd. 357 Fed. Appx. 734 (8th Cir. 2009); see sec.
1.6050P-1(c), Income Tax Regs.

Accompanying
the DOI rule are certain exclusions from gross income. Sec. 108(a)(1). Petitioner does not argue that any of the exclusions
apply; thus the Court does not consider them.

Petitioner
contends that he did not have DOI income on the basis that: (1) The amount he
owed MBNA was in dispute (a contested liability); (2) the amount of interest
MBNA was charging him was usurious; and (3) he did not receive a Form 1099-C
from MBNA and did not know that there would be any tax ramifications for
settling his account for less than the full amount of his MBNA account balance.

One
exception to the general DOI rule is the "contested liability"
doctrine, under which DOI income will be disregarded when computing gross
income if the taxpayer disputes the original amount of a debt in good faith and
the debt is subsequently settled. Preslar
v. Commissioner, 167 F.3d 1323, 1327 (10th Cir. 1999) (citing Zarin v. Commissioner, 916 F.2d 110, 115 (3d
Cir. 1990)), revg. T.C. Memo. 1996-543. A taxpayer's good faith challenge to the enforceability of a
debt does not necessarily shield him from DOI income when the dispute is
resolved. Preslar v. Commissioner, supra
at 1328; see also Rood v. Commissioner, T.C. Memo. 1996-248, affd. without published opinion
122 F.3d 1078 (11th Cir. 1997). "To implicate the contested liability
doctrine, the original amount of the debt must be unliquidated. A total denial
of liability is not a dispute touching upon the amount of the underlying
debt." Preslar v. Commissioner, supra
at 1328. Additionally, the fact that a settlement is for less than the full
amount of a taxpayer's debt is insufficient to establish that the debt was
disputed. Melvin v. Commissioner, T.C. Memo. 2009-199 (citing, e.g., Rood
v. Commissioner, supra). Petitioner has not shown a challenge to the
original amount of the underlying debt.

Petitioner
entered into evidence several letters that he wrote to MBNA in which he argues
that he does not owe the amount listed as the balance of his account.
Petitioner believed that he had paid more in interest than the underlying
principal balance of the account because he had not used the account for a number
of years.4In a letter dated November 30,
2004, petitioner contends that he has paid more than $16,000 "on the
underlying obligation". (Emphasis added.) In the same letter he also
contends that he does not owe MBNA $16,387.78. In a letter dated January 18,
2005, petitioner writes that his account balance as of December 19, 1998, was
$25,168.88. He then contends that between December 19, 1998, and December 20,
2002, he had paid MBNA $26,606 and had made additional payments since 2002.
Petitioner also documents the rise in the interest rate of his account in the
January 18, 2005, letter. In a letter dated March 8, 2005, petitioner writes
that he has paid MBNA a total of $34,451 but that he is not certain how much of
that amount was penalties and interest as opposed to principal.

Petitioner's
contention that the debt is contested is incorrect. Petitioner has made no
argument against the original amount of his debt. See Preslar
v. Commissioner, supra at 1327. Through petitioner's letters to MBNA
it is clear that his argument is with the amount of interest he is being
charged, not the underlying debt. Petitioner admits to making payments on the
underlying obligation in his letters and never argues that he did not incur the
charges on the account or that he did not owe the principal balance of the
account. The interest charged to petitioner's account is part of his debt
obligation. See Payne v. Commissioner, supra. Interest is
included in the definition of indebtedness. Sec. 1.6050P-1(c), Income Tax Regs.; cf. Payne v. Commissioner, supra.
Petitioner's challenge to the amount of interest he is charged does not rise to
a contested liability.

Coupled
with, and seemingly a second prong of, petitioner's contested liability
argument is his argument that the interest MBNA charged was usurious under New
York law and the discharge of such interest should, therefore, not be income to
him.

Petitioner
testified and mentioned in more than one letter admitted into evidence that the
usury rate of interest in New York was 25 percent.5 All of the
credit card statements that petitioner entered into evidence reflect an annual
interest rate of 22.98 percent. While this interest rate is high, it does not
reach the level of what petitioner claims is usurious in New York.6

Petitioner
also argues that he never received a Form 1099-C from MBNA and did not know
that there would be any tax ramifications for settling his debt for less than
the full amount. "The moment it becomes clear that a debt will never have
to be paid, such debt must be viewed as having been discharged." Cozzi v. Commissioner, 88 T.C. 435, 445
(1987). The nonreceipt of a Form 1099 does not
convert a taxable item into a nontaxable item. Vaughn v. Commissioner,
T.C. Memo. 1992-317, affd. without
published opinion 15 F.3d 1095 (9th Cir. 1993). Any identifiable event that
fixes the loss with certainty may be taken into consideration. Cozzi v. Commissioner, supra at 445
(citing United States v. S.S. White Dental Manufacturing Co., 274 U.S.
398 (1927)); cf. sec. 1.6050P-1(b)(2)(i)(F), Income Tax Regs. (listing a discharge of indebtedness pursuant to an agreement
between an applicable entity and a debtor to discharge indebtedness at less
than full consideration as one of the eight exclusive "identifiable
events" under which debt is discharged for information reporting
purposes).

Petitioner
is an attorney and a member of the Tax Court bar with legal acumen and a
fundamental knowledge of legal research. The fact that petitioner did not know
that there were tax ramifications associated with settling a debt for less than
its face value does not negate his enjoyment of the economic benefit from the
discharge of his debt. See sec. 61(a)(12); United
States v. Kirby Lumber Co., 284 U.S. 1 (1931).

CONCLUSION

Petitioner has failed to prove that there was a contested liability concerning
his MBNA account. Petitioner's failed usurious interest argument, his lack of
receipt of a Form 1099-C, and his lack of knowledge of DOI income tax
ramifications do not negate the fact that he received a discharge of debt that
resulted in income. Therefore, the $11,974.65 of petitioner's MBNA account
balance that was discharged is income to petitioners and should have been
included on their 2005 joint Federal income tax return.

We have
considered petitioner's arguments, and, to the extent not mentioned, we
conclude the arguments to be moot, irrelevant, or without merit.

To reflect
the foregoing,

Decision
will be entered for respondent.

FOOTNOTES

1 Petitioner Wendy Liotti did not sign the
stipulation of facts, nor did she appear at trial. Petitioner Thomas F. Liotti stated that he represented himself and his wife and
that she was listed as a petitioner solely because the couple filed a joint
Federal income tax return for the year in issue. This case is considered
submitted on the part of both petitioners. See Rule 149(a).

2 Other
changes determined in the notice of deficiency were computational and will not
be discussed.

3 The
payment of tax after the mailing of a notice of deficiency shall not deprive
the Court of jurisdiction over such deficiency. See sec. 6213(b)(4); Hazel v. Commissioner, T.C. Memo. 2008-134. The
Court also has jurisdiction to determine an overpayment in a deficiency
proceeding. See sec. 6512(b)(1).

4 Petitioner
cited both 1998 and 2001 as the last year that the account had been used.

5 Petitioner
has taken on the mantle of protecting all consumers from the aggressive tactics
of the credit card companies and even informed the Court that he was
"here, Judge, for the American people, as well as for myself."

6 Even if
petitioner had made a "good faith" challenge to the interest rate,
that alone would not "shield" him from DOI income. See Preslar v. Commissioner, 167 F.3d 1323, 1328
(10th Cir. 1999), revg. T.C. Memo. 1996-543.
Petitioner does not know how much of his account balance was
interest as opposed to principal.

Obama nominated Kathryn Keneally, a partner at Fulbright & Jaworski and longstanding officer in the ABA Tax Section
as chair of several important committees, as head of the Justice Department's
tax division.

Obama's
prior
nomination, Mary Smith, was blocked in the Senate because of her lack of
tax experience. Keneally, in comparison, has
extensive experiecne in tax controversies. As
her firm blurb notes, she 'has represented financial institutions, public and
private corporations and individuals in commercial litigation matters, in
addition to representing individuals and companies in federal, state and locasl tax proceedings, sensitive criminal
investigations, trials and appeals." Areas include "tax
controversy, tax fraud, money laundering, currency trnasaction
reporting, securities fraud, bank fraud, false statements, RICO and issues
under the U.S. Sentencing Guidelines."

Keneally has been a pro-taxpayer
litigator, arguing strenuously for taxpayer-favorable interpretations of
the Code and common law privileges, including an article castigating the
First Circuit for its decision in Textron that tax accrual workpapers, prepared in the ordinary course
of business for financial accounting purposes, were not
protected by the work product doctrine. If confirmed
as litigator in the Justice Department on behalf of the government,
which there is every expectation that she will be, she will need to look at
these issues more closely from the government's perspective.

IRS
Agrees to Allow Purchase of Breast Pumps With Pretax Dollars
In a surprising move, the IRS announced February 10 that it now believes that
money spent on breast pumps and breast-feeding supplies qualifies as a medical
expense under section 213(d) and is eligible for the itemized medical expense
deduction or reimbursable through tax-favored health flexible spending accounts
(FSAs).